Reverse mortgage popularity falls

The number of 'reverse mortgages' or equity release loans has been falling in New Zealand. Photo / File

A rise in the number of New Zealand babyboomers retiring is not being matched by a similar growth in the reverse mortgage market as the value and number of such loans written has fallen.

Deloitte Australia's Actuaries & Consultants' seventh study of the New Zealand sector out today showed the market at December 31 comprised 5300 loans with a total book of $444 million, down on the 6613 loans valued at $447 million four years previously.

"The New Zealand reverse mortgage market is stagnant and has been for some time. Unfortunately, this presents a very real risk that New Zealand seniors are in danger of missing out on the opportunity to live a more comfortable retirement, at home," Hickey said.

Rob Dowler, executive director of the Safe Home Equity Release Plans Association (SHERPA) which supported the study, said people were borrowing more.

"The market size is on a par with pre-GFC levels - while the size of each borrowing has increased the number of both borrowers and settlements is significantly down. This is largely due to fewer lenders offering the product for sale," Dowler said.